Newsflash on 5D mark III price: It's cheaper than the 5D II intro price

[Meh]

@BobSanderson totally agree with you, we don't know what Canon considered in their pricing, and we don't know what their costs or margins are or other factors they may consider. Pricing strategy takes into account many variables beyond costs and margins. At the end of the day, the manufacturer is going to set the price at what they think will maximize long-term revenue not only for a particular product but also for the brand.

You raise an interesting point about pros not being so concerned with a few hundred dollars more or less. Not sure I agree entirely, some pros may be even more sensitive to price when they have to justify it against the extra revenue they might earn with a new body, lens, or other piece of gear. For example, if their 5D2 still works they might have to seriously consider what practical difference it makes to upgrade... for themselves they might know the IQ is better but will it make a difference to a client and will they get more work by having a new body? For an amateur no such justification needs to be made, either you want it and can afford it or not.

Maybe pros should be begging Canon to raise the prices even higher so that so many of us enthusiasts won't buy such great gear and think we can offer to shoot a friend's wedding for $500

 

[jalbfb]

Seems to me that a whole host of factors and marketing strategies came into play, but the bottom line is they priced it at what they strongly felt the market would bear. I'd like to think that the price will eventually drift down, but it may not be until sometime next year. I was not around the Canon world when the 5D II initially came out. How long did its price take to drop from the original opening price? Also it appears all of the big camera stores are sticking to Canon's recommended price. I also wonder how long it'll take for refurbs to show up??!! It would probably knock off a 100 bucks or so the offering price. my 2c FWIW.

 

[Radiating]

US Dollars are the only thing that matter when comparing the original USD price to the current USD price. The difference in price based on inflation is about $3200 today, or about $300 less than the $3500 it currently lists for.

I don't know if the OP (before edit) included exchange rate (it was there by the time I first read it earlier today) but it is relevant nevertheless. I also don't know if Canon uses the model that is being suggested but in response to your point, if you're a executive at Canon Japan, the only thing that matters is Yen and it's very reasonable to believe that Canon Japan is setting the price in Yen, converting to USD at current exchange rates, and possibly consider whether that price in USD is too high for the market. But even in the case that they did think the USD price was a bit high, I think it more likely they would set the list price as is, see what happens, and offer a behind the scenes discount to wholesalers so that the street price would go down rather than having a significant disparity in the list pricing. I know not if any of this is true or what really happens at Canon HQ... just my idle speculation.

Ok, valid points. Taking that into consideration:

Assuming an intro price of $2700 in late 2008, adjusted for inflation, that would be about $2850 today. If we account for the exchange rate, in Yen in 9/2008 (rate of about ¥106/$1) $2700 is about ¥286200...and in Yen in 3/2012 (rate of about ¥81/$1) $3500 is about ¥283500. As far as adjusting for inflation/exchange rate to the Yen is concerned, the difference in yen is about ¥2700, and in USD today that difference would be about $33.33.

As far as I can tell, Canon introduced both cameras at roughly the same price point in their own currency.

I got my exchange rates from here (really quick bing search): http://www.x-rates.com/d/JPY/USD/hist2012.html

I used the exchange rate one month prior to the intro date as list prices in the various markets are invariably preconceived, though of course they might be using different number. Either way 76 Yen:USD was used for the 5DIII and 109 for the 5DII. Inflation was 7.8%. This results in $3500 vs $4170 USD.

Canon's prices for the 5D Mark II in Japan was 300k Yen, and for the 5D Mark III is 270k Yen. The projected price should have been 320k Yen.

If you go to http://www.canon.com/camera-museum you can see all of Canon's lenses and their intro prices in Yen. You'll notice that since the 1990's Canon has had almost no deviation in it's intro prices in Yen when adjusted for inflation. For example the 14mm f/2.8 L I was 298k yen in 1991 and 14mm f/2.8 L II was 307k yen in 2007. This matches the inflation rate down to fractions of a percent and you'll find a similar patterns in the rest of Canon's lenses and bodies, though their historical body prices aren't listed on that site.


I will agree with BobSanderson that invariably local rebates and price cuts over time will have no easily predictable pattern, as that's how Canon's pricing really works. Canon does not introduce products at what the market can bear but instead at what they have historically charged. Canon then tweaks pricing to what the market can bear with discounts. My point was simply that Canon's introduction pricing has been incredibly consistent and it is clear Canon broke tradition to price the 5DIII lower than the 5DII to begin with.

 

[dedrick427]

Accounting for the inflation (or deflation?) of me not having a job in 2008 to now being an IT engineer: The Canon 5D Mark III is a buhzillion dollars cheaper the the Mark II at their respective release dates. Thus, it'd be economically stupid for me not to buy one. At least that's the economics that I'm using to justify the purchase.

 

[Radiating]

You know, I would buy the "Yen has strengthened" argument, hence them jacking the price if.... it wasn't actually priced even MORE expensive in Japan than it is in the US.

Japanese price=358,000yen=4,377 USD

Might want to check reality before you spout off theoreticals.

And the kit price is priced at 100,000 yen more than the body alone, which is $1,222 roughly USD.

Here's a couple links for the equivalents of large electronic stores similar to Best Buy in Japan:

http://www.biccamera.com/bicbic/jsp/w/d_camera/canon/eos5dmarkiii/index.jsp

http://www.yodobashi.com/ec/promotion/newtopics/detail/10000000000000024435/index.html

Canon hasn't released official Japanese pricing yet, as of 3/3/2012, so my guess is those sites are just trying to price gouge people before the price is released. Confirmed world wide pricing pegs it around 270,000 Yen based on all of Canon's other pricing for their other products between regions. It makes no sense to charge so much more in Japan for it compared to all their other products as people will just buy gray market ones.

 

[YellowJersey]

I wonder if the higher mkIII price has to do with trying to keep mkII sales going.

 

[dbduchene]

All of this ignores mores law. Every 18 to once in while tech should have twice the capabilities at half of the cost. Marketing will drive the whole thing more then anything else. They will build the cheapest camera that they can sell at the highest price that they think that they can get. They are making a bet here and with the D800 time will tell if it was a good one. In business today the marketing department has more say in what we get and how much it cost than all of the other factors combined

 

[1982chris911]

Just a quick reminder on how companies price goods today.

There are pricing strategy consultants that do a lot of research on how to price such goods. I know of one such company that employs over 500ppl who do nothing else. Believe me, when I tell you that the rational for Nikon and Canon to price their products like they are priced takes exactly into account how much they can sell, how much discount they will give in the future after 6months, 1 year 2 years etc ... and how the competition will respond. Now don't get me wrong all I want to say is that the pricing even if ppl here don't like it follows a strategy that is probably planed to much greater detail than what you might think...
So the 3500 USD against 3000 USD is exactly where both companies see their chances.

Nikon needs market share (as it was loosing a lot the last few years), while Canon needs to become more profitable per unit sold ... but those are two different strategies so the target pricing shows the difference we see here now.

 

[AdamJ]

I suspect Nikon is not even making money on the D800. They are a small company who went through turmoil and think they can get some market share with the D800. I hope they succeed. Because go healthy compitation is good for all. i.e. customers.

I haven't read the whole thread but in case it hasn't been mentioned, Nikon is a wholly owned subsidiary of Mitsubishi which is a company with $250bn turnover. I doubt they're making a loss on the D800 but I agree that the competition is good for all consumers.

 

[SebSic]

Just stop masturbation with exchange rates !!! Canon did take this in concideration establishing the final price.

$3500 is just a BIG priice. People who will say "No it is so cheap ..." ar just too rich to remember life cost ...
In my country(France), for the price of Canon 5D III plus 24 70 2.8 L II (3500€ plus 2500€ less 300€ for kit price = 5700€) I can buy a brand new car, or a moto. I can rent an appartment with 2 rooms for a year ....

For professional use, as this is the main "instrument", this is not "too" expensive.
But for amators like me, who just love photos, this price is really high, and I will need sacrifices (not human lol) to buy the dream kit (5D III + 24 70 L II)

 

[K-amps]

I suspect Nikon is not even making money on the D800. They are a small company who went through turmoil and think they can get some market share with the D800. I hope they succeed. Because go healthy compitation is good for all. i.e. customers.

Yes competition is great. We got so much value form canon all these years and the reason was competition. I am glad the D800 was released at 3k, puts some downward pressure on other bodies.

BTW can a Business get insurance for loss of Business on such disasters... Is there such an insurance policy?

 

[Raddy]

Well, there is some funny thing about something being "cheaper" when considering the inflation rates and such.
Assuming back in 2008 your the average salary was equal to the price of a 5D Mark II, did the salary got adjusted in the same way the current price of the 5D Mark III did?

If something is considered to be "cheaper" now, it would allow me to buy a higher amount of a certain product when putting it into relation of my current income. At least for me this is not the case...
My salary did not develop in a way the price for a similar product (5d Mark II/5D Makr III) did.
So speaking of me, it can't be cheaper for me. ;-))

 

[Meh]

Well, there is some funny thing about something being "cheaper" when considering the inflation rates and such.
Assuming back in 2008 your the average salary was equal to the price of a 5D Mark II, did the salary got adjusted in the same way the current price of the 5D Mark III did?

If something is considered to be "cheaper" now, it would allow me to buy a higher amount of a certain product when putting it into relation of my current income. At least for me this is not the case...
My salary did not develop in a way the price for a similar product (5d Mark II/5D Makr III) did.
So speaking of me, it can't be cheaper for me. ;-))

Prices and cost of living have been rising faster than salaries for the last 20 years. That's part of what Occupy Wall Street was about... the 1% can buy a Canon 5D Mark III with little concern for the cost.

 

[wamsankas]

apple computers havent really changed price in the past 6 years. they continuously offer new technology at the same price point. ipad 1 was 499 so will ipad 3.

 

[Chuck Alaimo]

apple computers havent really changed price in the past 6 years. they continuously offer new technology at the same price point. ipad 1 was 499 so will ipad 3.

This is really an apples an oranges argument here. Cell phone/computer makers have several other revenue streams that come from these devises which earn them way more than setting a huge price for their product. Itunes makes so much for apple that they can put lots of R&D into new stuff and sell it at a loss because they'll make up for it. For camera's, you have lenses, flashes that add to to the revenue. And while the per unit profit margin is far greater on lets say a lens vs a song on itunes, how many songs are bought vs 24-70 2.8L lenses???? the pro dslr camera industry is so different than the camera industry that this isn't even an apples to oranges debate, its more like apples to 30 year aged single malt scotch!

 

[Mt Spokane Photography]

Just a quick reminder on how companies price goods today.

There are pricing strategy consultants that do a lot of research on how to price such goods. I know of one such company that employs over 500ppl who do nothing else. Believe me, when I tell you that the rational for Nikon and Canon to price their products like they are priced takes exactly into account how much they can sell, how much discount they will give in the future after 6months, 1 year 2 years etc ... and how the competition will respond. Now don't get me wrong all I want to say is that the pricing even if ppl here don't like it follows a strategy that is probably planed to much greater detail than what you might think...
So the 3500 USD against 3000 USD is exactly where both companies see their chances.

Nikon needs market share (as it was loosing a lot the last few years), while Canon needs to become more profitable per unit sold ... but those are two different strategies so the target pricing shows the difference we see here now.

While all of that is certainly true, price is also based on the cost to manufacture, cost of advertising, and other intangibles plus a markup. The marketing people confirm that there is a market and set a target price that will sell. If the two are not compatible, there will be no product, since it must make a profit. Canon has said in the past that they spend a huge amount of time trying to design a camera that can be made to a price point established by marketing,

I do believe that there are two different things happening.

Nikon is trying a strategy of getting cameras into the hands of consumers who will buy their very profitable lenses. The D800 reuses many internal parts from the D700, so the R&D cost is less, which helps.

Canon has either a more expensive design to produce, or, more likely, just sees that the market will accept the higher price. In that case, slow sales will quickly cause a hefty price drop.

 

[LetTheRightLensIn]

I keep seeing people posting about how they are dissatisfied with the 5D III price. I really have no idea where these posts are coming from. When you correct for inflation and exchange rate the 5D Mark II was introduced at $4200 in today's dollars and exchange rate. $3500 is noticeably cheaper than $4200 the last time I checked so I see no reason for the complaints about price. On top of that if the past is any indication the good news is 5D III intro price will be cut steeply and probably in half in the next few years. Hope that helps clear up the pricing issue.

And yet the 5D2 cost less than the 5D and the 50D less than the 20D. And even the D800 costs less than the D700. The 5D3 costs more than the 5D2. Which doesn't belong?

 

[tron]

Agreed not to mention the dynamic range improvements.

Dynamic range improvements? You must have missed many 5DMkIII tests!

Canon released a Nikon D3S with nearly twice the megapixels for nearly half the money. It's really an astonishing camera.

This is an apples to orange comparison. The 1DX is the equivalent of D3S (and D4) ...
Feel free to compare 5DmkIII with D800 though...

 

[briansquibb]

I keep seeing people posting about how they are dissatisfied with the 5D III price. I really have no idea where these posts are coming from. When you correct for inflation and exchange rate the 5D Mark II was introduced at $4200 in today's dollars and exchange rate. $3500 is noticeably cheaper than $4200 the last time I checked so I see no reason for the complaints about price. On top of that if the past is any indication the good news is 5D III intro price will be cut steeply and probably in half in the next few years. Hope that helps clear up the pricing issue.

And yet the 5D2 cost less than the 5D and the 50D less than the 20D. And even the D800 costs less than the D700. The 5D3 costs more than the 5D2. Which doesn't belong?

Hardly think the D800 is an upgrade to a D700

 

[Axilrod]

Agreed not to mention the dynamic range improvements.

Dynamic range improvements? You must have missed many 5DMkIII tests!

Canon released a Nikon D3S with nearly twice the megapixels for nearly half the money. It's really an astonishing camera.

This is an apples to orange comparison. The 1DX is the equivalent of D3S (and D4) ...
Feel free to compare 5DmkIII with D800 though...

You're about 4 months late to this argument.